Blizzard Entertainment acknowledged the worst-kept secret in the video game world this past weekend: A third installment of the blockbuster “Diablo” series is on the way. But the real celebration is going on in the Activision executive suite.
As gamers gush on message boards about the gameplay clips released Saturday and debate how the title will match up with its predecessors, the suits are investing in a heavy-duty abacus exercise.
Blizzard is already, hands down, the most dominant developer and publisher in the gaming industry. Its massive multiplayer online (MMO) game “World of Warcraft” has an active player population of 10 million people worldwide. An expansion pack is in the works, which will boost that number. Also looming is “Starcraft II,” the sequel to the company’s hit space-based strategy title that many consider to be the genre’s finest.
“Diablo III,” completes the Blizzard trifecta. Within a relatively short time frame, the company will have updates to all of its major franchises, something sure to create a revenue avalanche for the company and productivity slowdowns throughout the country–which makes Blizzard’s pending merger with Activision (nasdaq: ATVI - news - people ) even more intriguing.
Activision-Blizzard, as the company will be called, will become the industry’s largest publisher, displacing Electronic Arts (nasdaq: ERTS - news - people ) and leaving companies like Take-Two Interactive Software (nasdaq: TTWO - news - people ) and THQ (nasdaq: THQI - news - people ) as distant also-rans. The cash infusion of a new “Starcraft” and “Diablo” titles will only widen the gap.
Blizzard is something of an anomaly in the industry: It’s one of the few development houses that make hardcore games that appeal to casual gamers. The company polishes its titles obsessively, ensuring every detail meets its exacting standards. If not happy with the progress, Blizzard executives will cancel a game–even very late in the production process.
But Blizzard really distances itself from the competition by being business savvy; it would be hard to name another Western game maker that has found a way to monetize China.
The software piracy problem in that country is legendary. Publishers lose millions of dollars there every year as players have the option of paying the U.S. equivalent of $15 for a legitimate copy of a game–or $1 for the bootleg version.
How widespread is the problem? Id Software Chief Executive Todd Hollenshead once told me he saw bootleg copies of “Doom III” for sale in the country before the game had even been released in the U.S.
Blizzard knew full well that “Warcraft III” would be pirated–and so released a localized version of the game in 2002. To combat the bootleggers, the company dropped its retail price to something closer to what pirates normally charge. The theory: Let Chinese gamers know the company would meet them partway.
The gamble worked. Roughly 1 million legitimate copies of the game sold (though pirated copies still beat that handily). In the process, the company built a huge fan base for its “Warcraft” universe. Two years later, “World of Warcraft” debuted–a basically pirate-proof game, since players must log into Blizzard servers and pay to play. But the fan base Blizzard had built was solid, and Chinese players signed up.
Now, as “Starcraft II” edges toward release, the company is reportedly once again planning a Chinese localized version, hinting that the long-rumored “World of Starcraft” may finally be in the works. Amplifying those whispers are the job listings for an unannounced “next-gen MMO” title on the company’s job openings page.
(A reason for the frenzied speculation: Blizzard tends to work for years on games before announcing them. “Diablo 3,” for instance, has been in development for four years already. The price of the company’s perfectionism is long waits for its fans.)
Amid all the fervor surrounding the company’s upcoming games, there is one unanswered question: Blizzard has some of the industry’s most creative minds, so when can we expect to see a brand-new title? The company has tossed around the idea of an action game internally–but nothing has yet come of it. And it would be interesting to see how Blizzard would handle a role-playing game, given how deftly it has handled character development in its existing games.
But have patience. With an already full plate of announced in-development titles, Blizzard’s franchise juggernauts will continue to dominate the company’s time–something its fans don’t seem to mind at all.
Source — Forbes